Volkswagen sales are booming, perhaps you've noticed. In the year 2007, the German brand sold some 27,400 vehicles in Australia, up from 21,571 units in 2006. This represents a 27% improvement, or (almost) three times the total industry growth rate of 9.1%.

Volkswagen is now occupying tenth position on Australian vehicle sales charts. With it's broad range of desirable products continuing to expand, there is little doubt that their sales will grow even further. That being the case, there seems a real opportunity for VW to overtake Subaru, which is currently occupying the ninth position on the charts.

In Australia, the smallest Volkswagen is the Polo. It's a small hatchback, available in 3 door or 5 door body styles, equipped with a petrol or diesel engine. On this occasion, we road test the diesel version, which is known as TDI. The test car was a 5 door hatchback with the optional Black Magic Pearl Effect paint job. The 1.9 litre turbocharged diesel engine is matched to a 5 speed manual gearbox. Automatic transmission is not available for the Polo TDI.

The 1.9 litre diesel and the manual gearbox is a combination which is bound to excite those who enjoy exceptional fuel economy. We didn't audit the manufacturer's figures, because experience tells us that the quoted figures are always close to the mark. With the Polo TDI, Volkswagen indicate the fuel consumption is just 5 litres per 100 kilometres on the combined cycle.

No-one would complain about that! In fact this figure is outstanding. And the TDI is the most environmentally friendly Polo with CO2 emissions rated at just 135 grammes per kilometre.

The current price for the VW Polo is from $16,990 (RRP) for the 3 door "Club" hatchback with the 1.4 litre petrol engine and 5 speed manual transmission. The TDI (diesel) version, which is only available as a 5 door hatchback with a 5 speed manual transmission, is priced from $22,990 (RRP) without options. That makes the recommended retail price of the VW Polo TDI, as tested, $23,480 including the Pearl Effect paint. These figures exclude dealer costs and the various taxes/fees/charges/levies and/or duties demanded by state/territory governments.

Options on offer are; metallic/pearl effect paint ($490), sunroof ($1,490), safety package of side & curtain airbags ($700 for the TDI) and front seat height adjustment ($160).

Standard equipment for the TDI includes, but is not limited to; two front occupant airbags, engine immobiliser, rigid safety cell with front and rear crumple zones, anti-lock braking system (ABS), electronic brake-pressure distribution (EBD), remote central locking, automatic locking after take-off, removable luggage cover, full size spare wheel, tinted glass, air conditioning, cruise control, AM/FM radio with single disc CD player, power steering, height and reach adjustable steering wheel, split folding rear seat backrest and seat base (60/40) and, the all-important, cup holders (4).

It is a complete package, so it is bound to satisy many folks who only require a small car but seek outstanding fuel efficiency with good performance and low emissions.

On the road, the VW Polo TDI impresses with its willing performance. The 1.9 litre turbocharged diesel engine provides 74 kW of power (at 4,000 rpm) and a very decent 240 Nm of torque (in the range 1,800 to 2,400 rpm). The little car is less than 4 metres long (3,916 mm in fact) and weighs in at just 1,222 kilogrammes (approximately). Hence, the decent performance is understandable. And it is quite nimble.

The ride quality is pleasing and the steering and brakes (discs on all 4 wheels) work just the way you want them to work. The gearchange mechanism is easy and there is a driver's footrest to add that little bit of comfort for those long trips.

The Polo is a tiny car, yet the comfort level is pleasing and, yes, there is room in the back seat for 2 adults.

Luggage space is not abundant, but that is to be expected in a car in this market segment.

So what negative points are there with the outstanding Volkswagen Polo. Just one, there is no lumber support on the driver's seat. Although, in our 927 kms of driving we managed quite well without it.

The Volkswagen Polo is amongst the classiest cars in the 'light car' segment of the Australian new car market. It is also amongst the most expensive cars in its segment. But it is, clearly, amongst the very best.

Expect to pay a premium for a Polo diesel. It is an outstanding vehicle. But it isn't just the superb fuel economy. It is the entire package from the quality of the interior fittings to the interior comfort and from the standard features to the driving qualities.

It is quite an easy task to find a cheaper car than the Polo. But it is a very difficult task to find a better car in the 'light car' category of the booming Australian car market.